Lead-Lag Live Global Rotation Underway: Hervé Van Caloen on Japan’s Revival, Semiconductors, and Defense Spending
Jan 21, 2026
Hervé Van Caloen, Owner and Portfolio Manager at Mercator Investment Management, dives into exciting trends on a global scale. He discusses Japan's robust market recovery driven by ambitious reforms and stimulus. The conversation shifts to semiconductors, exploring how a few companies dominate the market. Hervé highlights the upcoming surge in defense and space spending, alongside AI's impact on infrastructure and electricity demand. He emphasizes the importance of global diversification as U.S. valuations stretch, making a compelling case for investors.
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Japan's Renewed Pro-Growth Momentum
- Japan's market revival began with Abe's reforms and is accelerating under Prime Minister Takechi.
- Takechi is pushing aggressive pro-growth policies, corporate governance change, and stimulus beyond Abe's initial program.
Semiconductors Are Structural Oligopolies
- The semiconductor industry is concentrated in monopolies or oligopolies because of extreme technological complexity.
- That structural concentration creates significant pricing power and profitability despite cyclical demand swings.
Japan's Rapidus Push To Reclaim Chips
- Japan is deliberately rebuilding domestic high-end chipmaking via Rapidus with government and corporate backing.
- Large Japanese firms and the state aim to make Rapidus a credible competitor to TSMC within years.